Julie Won does one or the other, if not both.
The Queens councilwoman is running for Congress as an advocate for affordable housing, which prompted her to do so tweet an excerpt from a recent interview in which she said she would make housing more affordable by reforming AMI.
Won’s tweet identified AMI as “average median income” and “annual median income.” Wrong on both counts.
AMI is area average income. It is used to determine who qualifies for affordable housing and what rents they pay.
Unfortunately, nomenclature wasn’t the only thing she got wrong about AMI during the interview.
“We need to fix AMI,” she told Errol Louis on NY1. “The average median income that we peg New York City affordability at is set by Congress, and as we as New Yorkers know, it is not affordable.”
It’s amazing how many mistakes and misconceptions she crammed into that one sentence.
AMI is not determined by Congress. It is calculated by the Department of Housing and Urban Development based on Census Bureau data from its American Community Survey.
HUD, not Congress, has adjusted its methodology over the years, but ultimately an area’s average income is determined by how much money people in an area make, and by the boundaries of that area. Large areas are used because housing markets are large and using a unique AMI for each enclave would be chaotic.
What Won was trying to say is that the incomes needed to qualify for many “affordable” units are too high for many New Yorkers, and that if AMI areas were more local, rents and income limits would be lower for affordable units in poor neighborhoods.
If anything, advocates like Won want Westchester removed from the area HUD usage to determine the AMI in New York City. But their dream is to use a hyperlocal AMI – only for the neighborhood where the homes are located.
If, by some miracle, Won is elected to Congress and passes legislation to that effect, it would wreak havoc on existing and future affordable housing and the hundreds of programs that use AMI. That is due to localizing AMI to make it lower in poor areas would not make housing cheaper to build or operate.
In fact, HUD applies a “high housing cost adjustment” to the AMI in New York to ensure that affordable housing programs are usable. Won would do the opposite, rendering them useless. This is why:
The AMI for a family of three in New York City is $145,800. Let’s assume that the median income in Brownsville is half that and that under Won’s law all affordable housing in Brownsville had to take advantage of that.
Now, if a family of three wants to set aside an apartment for households earning 40 percent of the AMI, instead of earning about $58,000 a year, they would have to earn only $29,000. That is less than the minimum wage for a full-time worker.
The maximum rent for a two-bedroom, 40 percent AMI unit would be $729, and a mother with two children and a $40,000 salary would be too rich to get that — if the apartment even existed. Which it probably wouldn’t do.
What Julie Won doesn’t understand, or won’t tell voters, is that two-bedroom homes for $729 a month are out of the question. It simply wouldn’t get built.
Worse still, existing affordable housing – already struggling to stay above water – would have to fill the vacancies at the new ultra-low rents. Buildings would quickly go bankrupt.
Likewise, so would using a local AMI increase rental prices and income requirements in wealthy areas. Won’s “solution” would move low-income families out of neighborhoods where poor children benefit most.
As my former colleague Joe Lovinger wrote in a 2022 article about the myth that changing AMI makes housing affordable: “Numbers are stubborn. Converting the speed limit to miles per hour won’t get you out of a speeding ticket.”
Read more
The Great AMI Debate: Are the Critics Clueless?
The quixotic quest to make the WTC tower 100% affordable
The Daily Dirt: Pol dances on the grave of megaproject
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